Stocks set to gain as AOL, dollar rally

Home Depot sets buyback; Citigroup downgraded

Pre-Open Stocks action

Stocks were poised to rally at Friday's open amid strength in media giant AOL Time Warner and the U.S. dollar, which was propped up by overnight comments from President Bush. An analyst downgrade of Dow industrials component Citigroup and an overnight warning from networker 3Com failed to derail the fledgling rally.

Broker action

Citigroup
C, -1.05%
was downgraded by USB Piper Jaffray to "outperform" from "strong buy," citing valuation following the stock's recent relative outperformance and potential fundamental headwinds, including a weaker U.S. consumer. Dow Chemical
DOW, -0.53%
was downgraded by Lehman Bros. to "equal weight" from "overweight," given the chance of the passage of the asbestos reform bill has declined over the past 10 days.

Home improvement retailer and Dow industrials component Home Depot
HD, -1.04%
said it has been authorized by its board of directors to buy back up to $500 million worth of common stock, effective immediately.

Shares of Ariad Pharmaceuticals
ARIA
soared in pre-open trading after the company said results from a Phase I trial showed that its lead cancer product candidate, AP23573, was "highly effective" in animal models of human solid tumors. In addition, the results indicated that three widely used chemotherapy drugs were "markedly enhanced" when combined with AP23573.

The National Association of Securities Dealers is investigating whether brokers, salespeople and managers at Prudential Securities falsified documents in an attempt to boost the sale of insurance products, the Wall Street Journal reported in its Friday edition, citing people familiar with the situation. The probe was triggered after the brokerage firm, a unit of Prudential Financial
PRU, -0.86%
contacted regulators following an internal investigation that suggested the possibility that certain brokers and managers had clients sign blank forms or forged signatures of clients who were replacing one annuity with another, the report said. Prudential couldn't be immediately reached for comnment.

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